How Pinterest Could Change Copyright Law
Greg is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If something looks too good to be true, it probably is. Even though we are all familiar with that adage, how many times have we gotten burned by thinking that, in this case, it didn’t apply? No hands, please. Just keep reading.
Users of Facebook (NASDAQ: FB) love posting pictures, comic strips, videos, news stories, sound bytes, and just about anything else that you can post. It’s great fun, and it probably consumes more man-hours in our country than we would care to find out. But now there’s another option for chronic posters: Pinterest. You could describe Pinterest as what you would get if you improved Facebook’s posting abilities and discarded all that pesky text that gets in the way. Suddenly, you can reach out across the Web, grabbing handfuls of pictures and videos, then pin them up for everyone else to see. Define your personality, express yourself, build a following…that kind of thing. But maybe it’s too good to be true.
Illegal file sharing is a big deal. Just look at last year’s shutting down of the website Megaupload, or the brouhaha over Napster a few years ago. Companies like Time Warner (NYSE: TWX) continue to go after sites that perpetrate, or encourage its users to perpetrate, the illegal exchange of copyrighted material. Guess what brand new, popular social media site does exactly that? Pinterest.
True, there is a section in its Terms of Service that reminds users to only post materials that they own or have legal rights to. It warns that the site owners have the right (but not an obligation) to take down material that turns out to be an infringement. And how would they know that something is an infringement?
They wouldn’t, unless the material’s actual owner sent them a Notice of Alleged Infringement via snail mail or webform. So it’s up to the busy people at Warner Bros. to sift through Pinterest accounts and look for illegally posted material that belongs to them.
An illegally posted item could be as blatant as a pirated movie clip, or as innocent as a photo from a local news story. That photo belongs to the corporation that paid for it, and it’s not legal to simply copy it and paste it somewhere else without permission or credit.
You’re probably not willing to contact the owner of every funny photo you find in order to get permission to post it on Pinterest. In fact, the site is prompting many to claim that U.S. copyright law is too outdated to apply to the Internet. That may be true in some cases—copying a news story photo probably doesn’t cheat anyone out of any money, even though it is technically illegal. But other common infringements due cost creators real money, and when thousands of people perpertrate them, it can be enough to put even a large company in a dangerous situation.
Until the law changes, though, it’s still the law. Infringement has a devastating effect on Warner Bros. and other companies that own lots of copyrighted material when people share that material for free on Facebook, Pinterest, and other sites. That effect also hurts artists, who suffer lost royalties when people can get access to their music, photography, and other creations without buying them. Warner Bros. knows that it risks projecting a "killjoy" image and alienating some potential customers by cracking down on illegal transfer of material, but stockholders should appreciate the actions. They show that the company understands how serious the threat is and that its future depends on preventing people from getting access to their copyrighted material for free. In fact, Warner Bros.' aggression makes it a good choice for investors looking for a responsible company that knows how to protect its assets. More "friendly," passive publishing houses might find themselves losing money and investing partners as people quit buying their offerings and start getting them for free instead.
One of the other companies that has been exceptionally active in protecting its copyrighted material online is Disney (NYSE: DIS). In fact, the company's vigorous interest in copyright law has played a central role in shaping U.S. law as a whole for decades, and now that the Internet has made things more complex, Disney is joining Warner Bros. in standing up for its rights in that medium. A large part of Disney's financial success over its history has been not only due to its lovable cartoon characters, but also to its determination not to allow anyone to get their hands on their products for free. This stance makes Disney a pretty safe investment if you see infringement as a serious problem, and it also makes it a model for other companies that need to strengthen their position a little more.
Be careful what you pin, post, re-post, and download! You could be cheating someone out of a profit they are entitled to, and if you own stock in the company in question, you’re actually cheating yourself. With the massive volume of activity that takes place online, it's never been more true that every little bit matters. Many responsible Internet users even take it upon themselves to correct others when they see that material has obviously been illegally posted. Until copyright law adjusts to both protect copyright owners and allow reasonable sharing online, we should all do our part to cut down on this activity.
copyhubwriters has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook. Motley Fool newsletter services recommend Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.